Hitachi Consulting Moves Human Resources to the Cloud

Hitachi Consulting Corporation is an interna­tional management and technology consulting firm headquartered in Dallas, Tfexas and a sub­sidiary of Hitachi Ltd. based in Tokyo, Japan. Hitachi Consulting currently employs approximately 6,500 people in 22 countries, including the United States, Japan, Brazil, China, India, Portugal, Singapore, Spain, the UK, Germany, and Vietnam. Because the company provides consulting services, its employees are its most important resource. To succeed competi­tively, Hitachi Consulting must ensure that it has the right number of employees with the right skills and expertise wherever and whenever the need for its consulting services arise. The human resources func­tion is especially important in a company of this sort.

Four years ago, Hitachi Consulting decided to grow its business model to include turnkey and custom solutions combining business best practices and leading-edge technologies such as the Internet of Things (IoT) as well as traditional consulting services. Hitachi is doing this across many areas—rail and transportation, energy, water, cities, healthcare, and public safety. A key success factor is to collabo­rate with partners, clients and other stakeholders across entire industries. These new offerings require people with appropriate talents and skills to deliver Hitachi Consulting’s new solution portfolio. The company had to recast its Human Resources depart­ment to operate more strategically so that it would have the right human resources in place to do the work.

Hitachi Consulting was saddled with multiple dis­parate local human resources systems (and in some cases just spreadsheets) that held its valuable em­ployee data. These systems were not integrated with the company’s legacy Human Resources system in the United States. There was no way to easily obtain an enterprise-wide view of the company’s workforce. When a senior executive requested such company­wide data for decision making, HR staff had to manu­ally assemble and aggregate the necessary data. The process would take days. Dealing with such complex manual processes and siloed data prevented the com­pany from operating under a “single source of truth.”

For the company to move forward, its Human Resources function had to be transformed and its legacy HR system needed to be replaced. One top priority was to improve business processes for tal­ent acquisition and development so that Hitachi Consulting could find the right people better, faster, and cheaper. In the past, Hitachi Consulting waited until a new position opened before actively recruit­ing new talent. Its new HR function sought to cul­tivate relationships with top candidates, fueled by employee referrals and social networks. Through ongoing dialogues, the HR staff could identify star talent and quickly hire these people when the time was right. Hitachi hoped that the new HR system would reduce recruiting costs, improve candidate experience, engagement, and retention, and expand recognition of Hitachi as an employer of choice.

Another high priority was having a single system of record as the authoritative source of information for all of HCC’s regions with a central repository for HR data. With an enterprise-wide cloud application, HR and IT managers could centrally assign autho­rizations for data access based on roles and respon­sibilities, while also enforcing global security and regulatory policies. HCC’s workforce regularly works at client sites and requires access to enterprise data and applications from tablets and smartphones, so the new solution needed to provide mobile access as well, which was not possible with HCC’s legacy systems. Other goals included expanded analytics and reporting capabilities, and a global platform to streamline compensation, benefits, and absence management.

A steering committee composed of HR, business, and IT leadership evaluated various technology options, selecting Oracle HCM Cloud for the solu­tion. Oracle HCM Cloud is a cloud-based system for Human Capital Management (HCM), providing a sin­gle global human resources solution to maintain em­ployee records, align common HR processes, attract, develop and retain top talent, improve employee productivity, control labor costs, and address simple and complex employee compensation needs. There are capabilities for recruiting candidates, managing performance, developing careers, providing learning, performing talent reviews, and planning successions.

Hitachi Consulting was growing quickly, and the flexibility of cloud computing was helpful when it had to quickly absorb large numbers of employ­ees from a new acquisition. At one point, Hitachi Consulting had less than two weeks to bring hun­dreds of new employees into its legacy HR system. With the old system, it was a challenge to ensure the company had sufficient hardware and software re­sources to accommodate the new employees without overspending for additional infrastructure, or just as risky, keeping a lid on infrastructure expenditures so that the system couldn’t handle future growth. With a cloud platform, Hitachi Consulting could simply bring the new employees into the HR application and adjust its contract with Oracle to accommodate the additional head count. Switching computing to a cloud software service provider also would relieve Hitachi Consulting’s IT staff from routine data center maintenance tasks, leaving more time for strategic business initiatives, such as creating reports and analyses for decision-makers.

Oracle HCM Cloud met all these requirements, and it also featured a streamlined modern interface that would make the system much easier for em­ployees to use than the antiquated interface of HCC’s legacy system. The Oracle cloud platform’s flexibility also appealed to the steering committee. With many cloud services, customers must adapt their processes to the services’ requirements. Oracle HCM Cloud of­fers standard processes, but it also lets organizations customize processes when necessary.

The HCC team steering committee also found that Oracle HCM Cloud offered tight security and regula­tory controls required to safeguard HR data, some of which is highly sensitive. For years, many companies were reluctant to adopt cloud computing, concerned that outside service providers would not be able to safeguard sensitive data as effectively as systems housed and managed on-site. Over time, cloud com­puting’s reputation for reliability and security has in­creased. More firms have decided that cloud security is on par with what they could do on premises. The HCC steering committee was convinced that Oracle is addressing the latest security threats and is doing everything as well as or better than the company to protect employee data.

Senior management approved the HR modern­ization plan in early 2014, with the new system projected to go live in September 2015. The project leaders realized they would need to carefully manage the employee experience so staffers would become comfortable with the changes created by the new system. Both HR and IT staff directly involved with the HR modernization project also had to perform their usual duties. Project leaders devised a time­sharing plan that pulled individuals into the mod­ernization project when their expertise was most needed, but quickly returned them to their regular jobs to keep HCC’s business on track.

Implementation of the Oracle Human Capital Management Cloud to serve Hitachi Consulting’s entire global workforce has provided many benefits for Hitachi Consulting. It has reduced the time and cost to hire new employees and improved top tal­ent identification, development, and retention. The employee referral process used to falter because staff members questioned whether their suggestions were actually implemented. With the new system, the re­ferring party is more clearly identified and tagged for eventual rewards if the referral leads to a successful new hire. HCC’s referral rate of new talent from cur­rent employees has increased from 17 to 35 percent. The company was able to save $1 million in the first year the system was operational by reducing pay­ments to search firms. It has become easier to absorb and integrate employees from acquisitions.

HCC senior executives and regional managers can now access workforce information when making de­cisions about HCC’s new business direction. For ex­ample, HCC’s senior executives recently asked HCC director of service delivery Matt Revell for the com­pany’s employee head count and turnover trends over the last 12 months to evaluate the investments managers were making for people in HCC’s sales and solutions organizations. To gather that information in the past, Revell’s staff had to request the data from managers in each HCC region and then standardize the information. (This was because some defini­tions, such as those for full-time employees versus contingent staff, weren’t consistent.) Only then could HCC’s U.S.-based analytics group aggregate the data and run the final report. Oracle HCM Cloud has cen­tralized all of HCC’s HR information and uses a com­mon enterprise-wide set of definitions. Reporting and analytics work can be accomplished much faster and more accurately.

The new centralized system has also made the HR department more efficient by replacing dozens of separate processes that had been running in various regions with standardized practices, and enhancing the ability to strategically analyze employee data. For example, HCC routinely reassigns hundreds of indi­viduals a year to posts outside their home countries for customer engagements that require specialized skills. The new, streamlined global system greatly improved the global transfer process, and it also serves as the system of record that feeds employee data for many mission-critical downstream systems. This has improved data integrity but also greatly im­proved the global visibility of HCC’s workforce, facili­tating strategic analysis of global employee data.

HCC transformation experts teach clients that fundamental change is an ongoing process, and that’s a lesson the company’s HR and IT departments are taking to heart. HCC leaders are now expanding their use of the compensation capabilities available within Oracle HCM Cloud to more closely manage sales force compensation. According to Sona Manzo, vice president of the Oracle HCM Cloud practice at HCC, the company needed time to determine how it would be transforming its sales organization, so it kept sales compensation as a separate initiative,

HCC is continuing to use new capabilities in Oracle HCM Cloud to help its business grow. The new system has been able to handle complex bonus packages tailored for salespeople in each country.

For example, “hot skill” bonuses are critical for at­tracting talent in Asia Pacific locations, but are not used in other regions such as the Americas. HCC will soon be able to track multiple bonus plans in each country and is investigating capabilities that enable managers to request and approve bonus or salary in­creases via mobile devices.

Source: Laudon Kenneth C., Laudon Jane Price (2020), Management Information Systems: Managing the Digital Firm, Pearson; 16^th edition.